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Connecticut governor CUs launch student loan program
MERIDEN, Conn. (11/20/08)--Connecticut’s governor and the state’s credit unions will work together to provide new and current students with access to higher education through a new student loan program. The Credit Union League of Connecticut and officials from Connecticut’s credit unions met with Gov. M. Jodi Rell Tuesday to discuss the state’s economic situation and to propose the new partnership between the state and the credit unions. Credit union officials pledged support of the governor’s concept and estimated that up to $17.5 million could be committed to the program. The program would offer interest rates at no higher than 6% or 5.75%. Institutions offering 6% loans could defer interest payments for one year; credit unions offering 5.75% loans would not defer interest payments. The loans would be offered to students who may not qualify for traditional loans or who already have used all of their resources and are having a hard time funding tuition. In light of taking on this risk, Rell said the Connecticut Health and Education Facilities Authority (CHEFA) would provide 20% loan guarantees on the loans. “I view the new credit union student loan program as another tool, a bridge loan if you will, to help families and students through the next few years of a weakened economy and very difficult strains on household budgets,” said Tony Emerson, league president/CEO. “All of us know we will come out of this current fiscal downturn, but there will be some hard times before we do,” he added. “The best way our state can position itself for this economic future is to continue to invest in an educated and diverse work force. Our credit unions understand this and have stepped forward, in partnership with the state, to help us accomplish this goal. “Credit unions remain healthy in the current economy due to key differences in our structure,” and have money to lend, Emerson said. The league will administer the student loan program with CHEFA. The program will be open to all students that live or go to school in Connecticut. The funds will not be pooled, and individual credit unions will allocate their own funds. Credit unions must allocate a minimum of $100,000 of their funds to participate in the loan program, which will run for one year with the possibility of extending that period, based on demand and available resources. The program is expected to officially begin Dec 8. For a list of participating credit unions, use the league link.
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